Compansation received on natural disaster

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This query is : Resolved

Deepika Mallawat (Querist)

27 July 2015 I want to know weather compensation received on natural disaster is taxable. if yes then in which head it is taxable.

Vijay Parmar

Vijay Parmar (Expert)

27 July 2015 No, it is exempt as subject to section 10(10BC)

please refer below section......

Compensation on account of any disaster [Section 10(10BC)]
Any amount received from the Central Government or State Government or a Local Authority by
an individual or his legal heirs as compensation on account of any disaster is exempt from tax.
However, no deduction is available in respect of the amount received or receivable to the extent
such individual or his legal heirs has been allowed a deduction under the Act on account of loss
or damage caused due to such disaster. Disaster here means any disaster due to any natural or
man-made causes or by accident/negligence which results in substantial loss of human life odamage to property or environment and the magnitude of such disaster is beyond coping capacity
of community of the affected area

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